China Sulphur Slumps to CNY 6,669 a Tonne as Gulf Contract Prices Fall and Phosphate Margins Stay Negative
Domestic sulphur fell 13.23% from the start of October to a CNY 6,669 a tonne benchmark on October 16 after Middle East producers cut official selling prices and Chinese phosphate plants kept run rates under half.
China's sulphur market has broken down through the second half of October. The 100ppi benchmark price was set at 6,669.00 yuan a tonne on October 16, down 13.23% from 7,685.67 yuan at the start of the month and including a single-day drop of 6.94% on October 15. The China sulphur series tracked on Market Pulse Scope shows the same move: CNY 6,669 a tonne, down 9.91% over seven days. Regional assessments confirm it, with Zhenjiang port granular at 6,850 yuan and Dafeng port granular at 6,830 yuan, both down 200 yuan on the day, Shandong refinery liquid auctioned at 6,200-6,255 yuan, and east China liquid at 6,485 yuan after a 660 yuan daily fall.
The trigger was upstream. QatarEnergy set its October sulphur official selling price at $835 a tonne FOB, Kuwait Petroleum Corporation at $820 FOB and ADNOC at $890 FOB Ruwais, cuts of $45, $45 and $70 a tonne respectively from September. Argus assessed freight at $150-160 a tonne for a 30,000-35,000 tonne cargo from inside the Strait of Hormuz to Chinese ports on October 1, implying a delivered cost of $970-980 a tonne CFR China, and noted that delivered granular sulphur had already fallen 8% from $1,050 a tonne CFR on August 6 to $965 by October 1 because of demand destruction rather than easier supply. Lion Global Sulphur argued the same point: Hormuz transits still run at roughly a quarter of normal volumes, Russia and Kazakhstan are still not exporting, and global phosphate plant operating rates sit at 50-60%.
Downstream economics explain why lower feedstock has not restored demand. JLC data put national monoammonium phosphate operating rates at 46.23%, down 0.42 percentage points on the week and 9.79 points on the year, with diammonium phosphate at 42.35%, down 16.59 points year on year. Theoretical margins are deeply negative at roughly -1,378.52 yuan a tonne for MAP and -1,180.42 yuan a tonne for DAP, and importers along the Yangtze are losing about 291 yuan a tonne on landed cargo. Autumn fertiliser production is winding down, sulphuric acid demand is split regionally with Hunan tight and Shandong undercut by cheap external volumes, and 66% of trade participants surveyed by 100ppi expect further falls.
The counterweight is inventory. National port sulphur stocks recovered to about 1.12 million tonnes by mid-October, up 170,000 tonnes from September 24 but still roughly 1.3 million tonnes below a year earlier and around 60% of a normal working stock. JLC assessed Yangtze-coast imported bulk granular at 7,000-7,050 yuan a tonne, down 200 yuan on the pre-holiday average, with Shandong liquid sulphur at 6,800-7,000 yuan after a fall of nearly 800 yuan, and CFR China granular at $900-950 a tonne, down $50. Middle East producers and traders argue the deficit runs into 2027, with Argus forecasting global sulphur exports of 14.5 million tonnes this year, 30% below 2025, and noting that sulphur has recently accounted for more than half of the value share in Moroccan FOB DAP against a normal 10%. Winter storage buying from late October is the next test of whether demand destruction or tight supply sets the floor.